[Legislativecommittee1] MH Title Change Bill

Thu Sep 26 16:47:00 PDT 2024

JP and I have talked to Victoria, and it isn’t clear yet that what they have, and what their goals are, will fit with that title insurance would require. I will work with her and report to the Legislative Committee, if that’s OK with the group. However, if someone can also participate, please step in.

I will summarize what I know about how these properties are currently set up, and identify what she will try to provide me as they move forward with possible legislation. (The following will be helpful for me as we get into this, but please read an comment if you can.)

1.	The organization (Northwest Cooperative Development Center) facilitates the creation of a cooperative that, as an entity comprised of occupants of a mobile home park, acquires title to the park. 

2.	The goal is to allow real property financing of individual mobile homes, of the type contemplated when the statute was adopted that allowed for de-titling a MH so that it became part of the land, like a “stick built” home and was not titled as a vehicle, nor considered personal property nor a fixture.

3.	After acquiring the land, the cooperative then leases the space upon which an individual MH is located to the owner of that MH. The lease term is perpetual (not 99-years, which would be problematic anyway), and the lease has an ambiguous description, and is not recorded. Query = would it be recordable?

4.	Consequently, the “estate” created by the lease may be a leasehold or may be recharacterized as a fee, or a qualified fee, or – you name it. Insurable? If so, how would the estate be described in Schedule A?

5.	“Lots” (spaces upon which a mobile home is located) are not platted subdivision lots, so that there is most likely not a “good and sufficient” legal description of individual spaces for title insurance purposes. There is likely a map of the park with spaces delineated. It’s not clear if the entire land is surveyed when the coop acquires it. Insurable? If so, how described? Exceptions?

6.	The lessee (an owner of/in the cooperative) can assign it’s interest if they sell, or a heir if often “added” to the lease by the cooperative; it’s not clear how title can be transferred or if a new lease might be given. Query = what exceptions might be taken for the sufficient transfer of the “lessee’s” interest? What requirements might be 

7.	MHs located on the spaces are of varying ages and some are subject to financing that is typical of mobile homes – either still subject to the financing provided by the MH manufacturer, or perhaps subject to a loan made by a lender that specializes in or offers MH financing or re-financing. Other spaces might have an unencumbered MH. Title insurance will likely be required if a “regular” lender is persuaded to finance the acquisition of a new MH once de-titled. 

8.	I understand that Fannie Mae has regs that permit loans by regular lenders, and that title insurance is provided. California is supposed to be doing these kinds of transactions.

9.	She will try to provide me with: (1) an example of such a cooperatively owned property, (2) Fannie Mae guidelines for lender requirements, (3) a mortgage secured by one of these MH/lot combos, (4) a title insurance policy (likely issued in California), (5) a map?

JP and I told her that basically, the de-titling of a mobile home on land that is not owned directly by the MH owner can be problematic because of the ambiguity of the nature of the title to the MH after it is de-titled. The lack of an insurable legal description and the 99-year lease may pose problems as well. 

But, I will review what is provided. I would like to have someone else involved, particularly one familiar with mobile homes and the de-titling process, and perhaps the MH park conversions. Is there someone out there on the committee (or that you know of) that can assist in this?

George

George Peters, WTP

Executive Director

Washington Land Title Association

 <https://washingtonlandtitle.com> https://washingtonlandtitle.com 

Mail: PO Box 328, Lynnwood, WA 98046

Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036

206-437-5869 (Mobile)

206-260-4731 (Fax)

 <mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com

This is a confidential communication intended solely for the named recipient. If you are not the intended recipient, please destroy it and call George Peters at 206-437-5869 immediately. Thank you.

From: George Peters <execdirector at washingtonlandtitle.com> 
Sent: Wednesday, September 25, 2024 10:28 AM
To: 1 WLTA Legislative Committee (legislativecommittee1 at washingtonlandtitle.com) <legislativecommittee1 at washingtonlandtitle.com>
Subject: FW: MH Title Change Bill
Importance: High

Please see the attached draft of a bill relating to mobile/manufactured homes.

Do we have a volunteer to review the language and recommend support/oppose/neutral stance by the WLTA, and/or any language changes?

They want to schedule a meeting next week. 

My initial take with a quick read is that if the land is owned by cooperative, then how will title to any improvement (whether a mobile home after de-titling or a stick-built home) be treated if it is separately owned in “fee” by the homeowner?

What would the nature of the title to the mobile home actually be? If the cooperative owns a number of platted lots, de-titling a mobile home on one lot would require vesting title in the cooperative as to the land and the mobile home owner as to the mobile home. There would be a de facto severance. Are we comfortable with that? Would a lender be comfortable with that? The cooperative would not likely be willing to sign the deed of trust, and might not be permitted by its organizational structure. And any foreclosure of the entirety (if the cooperative were to execute the deed of trust) would separate the lot from the rest of the cooperatively owned land.

Would de-titling the mobile home somehow merge the cooperative’s fee title to the lot with the title to the mobile home? That would likely not be possible under any cooperative’s structure, purpose, etc., as well. Would future ownership of the mobile home by a lender after a foreclosure create problems with the cooperative structure of ownership of the land.

If there is no merger of title between the and the improvement located on that land, would lenders even be willing to make a loan on just the mobile home, as real property, with title severed (indirectly, with nothing formal from the cooperative) from title to the lot? Presumably there will be a lease from the cooperative to the lot owner. Most coop structures provide the when you “buy” a lot, you purchase an interest in the cooperative, becoming a co-owner of the cooperative, and get a long term lease for your lot. HOWEVER whatever possessory interest the mobile home owner has in the land (I assume the mobile homeowner going into this process does have that lease) would need to be considered insurable by a title company. Does the lease contemplate separate fee ownership of the improvement. (Many land trusts and leases given by them to the coop owner are vague (for title insurance purposes) about ownership of the home on the coop’s lots.

These issues are discussed in some more detail in Section 2.19 (“Community Land Trusts”) of the Leasehold chapter of the Examiners Manual. I believe the issues discussed there should be considered when reviewing this proposed legislation language.

Can someone take the lead here and work with Victoria on these issues, perhaps after a meeting of the legislative committee? I can probably join in on that discussion, but someone with more current experience with mobile homes and cooperatives should work on this.

George

George Peters, WTP

Executive Director

Washington Land Title Association

 <https://washingtonlandtitle.com> https://washingtonlandtitle.com 

Mail: PO Box 328, Lynnwood, WA 98046

Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036

206-437-5869 (Mobile)

206-260-4731 (Fax)

 <mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com

This is a confidential communication intended solely for the named recipient. If you are not the intended recipient, please destroy it and call George Peters at 206-437-5869 immediately. Thank you.

From: Victoria O'Banion <victoria at nwcdc.coop <mailto:victoria at nwcdc.coop> > 
Sent: Tuesday, September 24, 2024 9:00 PM
To: George Peters <execdirector at washingtonlandtitle.com <mailto:execdirector at washingtonlandtitle.com> >
Subject: Re: MH Title Change Bill

Good Morning George,

Fresh off the press is the attached bill draft. Would you be able to schedule a call for next week to talk through this proposed legislation?

Thanks!

On Fri, Sep 20, 2024 at 1:25 PM George Peters <execdirector at washingtonlandtitle.com <mailto:execdirector at washingtonlandtitle.com> > wrote:

Good afternoon, Victoria. Do you have proposed language for the bill you are proposing? We’d love to be able to review it as soon as possible, even if it’s a very preliminary early draft.

Thanks!

George

George Peters, WTP

Executive Director

Washington Land Title Association

 <https://washingtonlandtitle.com> https://washingtonlandtitle.com 

Mail: PO Box 328, Lynnwood, WA 98046

Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036

206-437-5869 (Mobile)

206-260-4731 (Fax)

 <mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com

This is a confidential communication intended solely for the named recipient. If you are not the intended recipient, please destroy it and call George Peters at 206-437-5869 immediately. Thank you.

 From: George Peters <execdirector at washingtonlandtitle.com <mailto:execdirector at washingtonlandtitle.com> > 
Sent: Thursday, September 19, 2024 4:03 PM
To: 'Victoria O'Banion' <victoria at nwcdc.coop <mailto:victoria at nwcdc.coop> >
Subject: RE: MH Title Change Bill
Importance: High

Good afternoon, Victoria, and thanks for your inquiry.

We would be happy to look at any bill that you propose for the upcoming legislative session. Our Legislative Committee reviews all bills that might affect real property and in particular those that might affect title insurance and escrow closings. I will pass your email along, and you may hear from someone on the committee.

In the meantime, if you have any bill language that you are considering, even if it’s just in preliminary draft form, please also send that along to me. We would very much like to see it in advance of it reaching committee stage.

George

George Peters, WTP

Executive Director

Washington Land Title Association

 <https://washingtonlandtitle.com> https://washingtonlandtitle.com 

Mail: PO Box 328, Lynnwood, WA 98046

Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036

206-437-5869 (Mobile)

206-260-4731 (Fax)

 <mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com

This is a confidential communication intended solely for the named recipient. If you are not the intended recipient, please destroy it and call George Peters at 206-437-5869 immediately. Thank you.

From: Victoria O'Banion <victoria at nwcdc.coop <mailto:victoria at nwcdc.coop> > 
Sent: Wednesday, September 18, 2024 3:05 PM
To: execdirector at washingtonlandtitle.com <mailto:execdirector at washingtonlandtitle.com> 
Subject: MH Title Change Bill

Good Afternoon Mr. Peters,

I am working with several representatives on a bill that would allow residents in manufactured home communities to change the title of their home from personal to real property. I have spoken with the Department of Revenue, the Department of Licensing, and the Department of Commerce. All of the agencies have no initial objections to the concept. 

The goal with this statute change would be to allow residents in cooperatively owned manufactured home communities the ability to access Title II loans. Fannie Mae has been securing loans to homeowners cooperatively owned manufactured home communities in New Hampshire since 2008 and they are eager to expand the program. In talking with my colleagues in Minnesota who recently passed similar legislation I was encouraged to reach out to your organization. We want to ensure that mortgage insurers are comfortable with the cooperative model.

Would you be available to schedule a call for the first week of October?

Thank you,

Victoria

-- 

Victoria N. H. O'Banion (she/her/hers)

Cooperative Housing Development Manager

Northwest Cooperative Development Center

 <http://www.rocnorthwest.com> www.rocnorthwest.com 

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